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Editor’s Note: Managing Performance Management

By Debbie Bolla

At our annual HRO Today Forum in May, we honored four chief HR officers with our annual CHRO of the Year awards. This year’s recipient of the Lifetime Achievement award was Kimberly Hauer, VP and CHRO for machinery designer Caterpillar. Hauer has worked for the organization for nearly 20 years—which is considered a lifetime by today’s standards. She started as an intern and now oversees more than 100,000 employees globally. In our cover story, Excavating Value on page 12, Hauer discusses how transparent communication, leadership development, and HR initiatives that are tied to business strategy have made Caterpillar an employer of choice in today’s competitive labor market.

While at the Forum, Hauer also participated in one of our popular CHRO panels. One topic she spoke strongly about was performance management. Now performance management is no stranger to the spotlight these days. In recent years, many organizations have overhauled their programs—or gotten rid of them entirely.

In Once is Not Enough on page 58, Halogen’s Anita Bowness says: “Annual performance reviews often don’t make a tie between performance and organizational objectives or outcomes, leaving employees unsure about their role and how they contribute to the business and its success.” Research from Gallup confirms this—50 percent of employees don’t know what is expected from them at work.

Hauer’s team came to a similar conclusion after diving deep into what they wanted from performance management.

“There are two things. We want to drive a good conversation between the boss and the employee, and we want to differentiate pay,” she said while on stage. “Then we took a step back to see what in our process was driving that outcome, and the reality was, there was very little.”

Through a global talent management platform, Caterpillar’s new performance management process includes a refined rating scale to better differentiate performance.

Now’s the perfect chance for me to ask: How are we doing? As we plan our editorial calendar for 2017, feel free to email or tweet me any topics that you’d like to see more of in these pages.

Debbie Bolla
Editorial Director

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